Artificial intelligence set to be the next tech pillar of investments - MIDA | Malaysian Investment Development Authority
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Artificial intelligence set to be the next tech pillar of investments

Artificial intelligence set to be the next tech pillar of investments

15 Feb 2023

More investments are poised to be poured into a relatively new space in the technology industry – artificial intelligence (AI).

The potential winners of the development in this space would be technology suppliers and contractors that are listed in Malaysia.

PublicInvest Research said AI could potentially revolutionise semiconductor manufacturing globally, moving forward.

This as the growing influence of AI is poised to reshape industries from logistics, education and healthcare to automotive and manufacturing in the longer term, it said.

“It is starting to look like 2023 may be the year when AI goes mainstream. Generative AI is a technology that uses machine learning to create new content, based on simple instruction,” the research house said.

ChatGPT, which had been hogging the headlines of late, is one example of text-to-text Generative AI while there are also text-to-image, text or image-to-video, text-to-music and numerous other projects.

“Companies like ABB, Nvidia and Dynatrace are already developing AI applications to make industries like healthcare, education and manufacturing more efficient and responsive.

“Furthermore, AI requires large amounts of data to be processed and high-performance hardware to train models. Digital data is currently growing at about 60% per annum, fuelling massive demand for cloud computing,” PublicInvest added.

However, the generation of grammatically correct, human-like written text by AI applications can be used to make social engineering attacks such as phishing or business email, making scams harder to detect and remove.

“As a result, corporate cybersecurity budgets will continue to rise. Gartner expects information security spending to reach US$187bil (RM813.17bil) as companies raise their outlay, including on AI-augmented security tools, to fend off new cyberattack tactics.

“In short, the expansion in expenditure on AI, cloud and cybersecurity is expected to post strong earnings growth for the leading companies in these sectors,” it added.

Meanwhile, according to Nikkei Asia, major US chip equipment suppliers are shifting operations from China to South-East Asia in a sign that US export controls enacted last October are accelerating the decoupling of tech supply chains between the world’s two largest economies.

“Applied Materials, Lam Research and KLS, which collectively own about 35% of the global market share for chip production equipment, have been increasing their production capacity in South-East Asia or relocating their workforce from China to Singapore and Malaysia since October,” PublicInvest said.

It noted that the relocation of major semiconductor players to Malaysia will see more smaller global semiconductor companies following their footsteps.

PublicInvest said this move not only helps increase job orders for local players but will also widen the scope of the semiconductor value chain in Malaysia.

“We think there will be more potential developments, especially in the front-end wafer fabrication and fabless deign fields, which can help widen Malaysia’s semiconductor value chain,” it said.

Source: The Star